C & D Electronics, Inc

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IN THE MATTER OF C & D ELECTRONICS, INC., ET AL.

CONSENT ORDER IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket C-3212. Complaint, March 6, 1987—Decision, March 6, 1987 This consent order prohibits, among other things, a Jenison, Mich. manufacturer and marketer of cable television decoders from selling or distributing the decoders to any unauthorized purchasers and requires respondents to cease representing that: (1) consumers can lawfully own or use decoders; (2) the use of decoders is legal without authorization from a cable company; or (3) ownership or use of a cable decoder is similar to the ownership or use of a telephone. The consent order also requires respondents to make an affirmative disclosure with the sale of any of their cable television decoders.

Appearances For the Commission: Alan E. Krause.

For the respondents: G.R. McIneney, Grand Rapids, MI. COMPLAINT The Federal Trade Commission, having reason to believe that respondents C&D Electronics, Inc., a corporation, and David Barwacz and Larry Bostelaar, individually and as officers of the corporation, have violated the provisions of Section 5(a) of the Federal Trade Commission Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint and alleges that:

PARAGRAPH 1. Respondent C&D Electronics, Inc., is a Michigan Corporation with its principal place of business located at 2026 Chicago Avenue, Jenison, Michigan 49428.

Par. 2. Respondent Larry Bostelaar is an individual residing at 7920 Ronson, Jenison, Michigan 49428. He is a stockholder, officer and director of C&D Electronics, Inc. Individually or in concert with others, he formulated, directed and controlled the acts and practices of respondent C&D Electronics, Inc., including the acts and practices alleged in this complaint.

Par. 3. Respondent David Barwacz is an individual residing at 2532 Northborough Court, NE, Grand Rapids, Michigan 49505. He is a stockholder, officer and director of C&D Electronics, Inc. Individually C & D ELECTRONICS, INC., ET AL. 73 72 Complaint or in concert with others, he formulated, directed and controlled the acts and practices of respondent C&D Electronics, Inc., including the acts and practices alleged in this complaint. [2] Par. 4. Respondents at the times mentioned in this complaint maintained a substantial course of business, including the acts or practices hereinafter set forth, in or affecting commerce, as “commerce” is defined in the Federal Trade Commission Act. Par. 5. Respondents have been engaged in the manufacturing, advertising, distributing and selling of cable television decoders, descramblers, converter-decoders, and converter-descramblers which were capable of decoding or descrambling certain television signals transmitted by cable to subscribers of various cable television systems throughout the United States.

Par. 6. Cable system operators provide decoders, descramblers, converter-decoders or converter-descramblers to their subscribers as part of the cable delivery system in order to determine and charge for the level of programming service used.

Par. 7. Cable system operators routinely prohibit subscribers from attaching to their cable system any decoder, descrambler, converterdecoder, or converter-descrambler other than one provided by the cable system operator.

Par. 8. Cable television decoders, descramblers, converter-decoders and converter-descramblers sold by respondents were designed and have been used to allow the unauthorized viewing of certain signals transmitted by cable television systems operating throughout the United States.

Par. 9. The sales of respondents’ cable television decoders, descramblers, converter-decoders and converter-descramblers have resulted in the loss to cable companies of potential or present cable service subscription revenues. As a result, legitimate cable subscribers pay higher prices for cable service or receive reduced services from the cable companies. In addition, municipalities granting the franchises to provide cable television service receive reduced franchise fees from the cable companies to the detriment of all consumers in the municipalities.

Par. 10. Respondents’ actions as described above have thus caused substantial and ongoing injury that is not outweighed by any countervailing benefits to consumers or competition and is not reasonably avoidable by consumers. [8] Par. 11. The acts and practices as herein alleged are to the prejudice and injury of the public and constituted unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.

Commissioner Azcuenaga was recorded as dissenting. Decision and Order 109 F.T.C.

DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondents named in the caption hereof, and the respondents having been furnished thereafter with a copy of a draft of complaint which the Chicago Regional Office proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with violation of the Federal Trade Commission Act; and The respondents, their attorney, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission’s Rules; and [2] The Commission having thereafter considered the matter and having determined that it has reason to believe that the respondents have violated the said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent C&D Electronics, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of Michigan, with its office and principal place of business located at 2026 Chicago Avenue, Jenison, Michigan 49428. Respondents David Barwacz and Larry Bostelaar are officers of said corporation. They formulate, direct and control the policies, acts and practices of said corporation and their address is the same as that of said corporation.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER For purposes of this order, the following definitions are applicable: tA5 1 7 1 1 2 707 2734 177 32 84.370148 authorized5 1 7 1 1 3 892 2731 186 41 96.196487 person(s)”5 1 7 1 1 4 1090 2730 91 33 96.873047 shall5 1 7 1 1 5 1195 2740 102 21 96.942642 means 1 7 1 1 6 1310 2738 69 29 96.864563 any5 1 7 1 1 7 1391 2737 124 30 96.531960 persons 1 7 1 1 8 1528 2726 79 32 96.948334 that5 1 7 1 1 9 1619 2726 28 32 96.036659 is5 1 7 1 1 10 1660 2735 21 22 96.036659 a5 1 7 1 1 11 1693 2725 97 32 93.293846 cables 1 7 1 1 12 1802 2734 116 30 93.083755 opera-4 1 7 1 2 0 610 2774 1308 47 -1 5 1 7 1 2 1 610 2788 55 28 96.572060 tors 1 7 1 2 2 681 2794 38 21 96.934738 or5 1 7 1 2 3 735 2794 20 21 96.922241 a5 1 7 1 2 4 772 2783 97 32 96.922241 cables 1 7 1 2 5 885 2785 130 36 96.504799 systems 1 7 1 2 6 1032 2783 170 36 96.259140 operator,5 1 7 1 2 7 1220 2779 181 39 96.746666 operating5 1 7 1 2 8 1417 2788 21 21 97.000732 a5 1 7 1 2 9 1455 2777 95 32 96.833038 cables 1 7 1 2 10 1567 2778 139 37 96.562561 system,5 1 7 1 2 11 1724 2784 39 22 96.879814 as5 1 7 1 2 12 1779 2774 139 32 96.964951 defined C & D ELECTRONICS, INC., ET AL. 75 72 Decision and Order herein, pursuant to a franchise issued by a cable franchising authority, or any person manufacturing or distributing cable television decoders, descramblers converter-decoders, or converter-descramblers pursuant to a contract, agreement, license or other arrangement with a cable operator or a cable system operator to provide, furnish or supply such products to a cable system.

“Cable operator’ or “cable system operator” shall mean any person, partnership, or corporation that provides cable service over a cable system or that, directly or through one or more affiliates, owns a significant interest in any cable system or who otherwise controls or is responsible for, through any arrangement, the management and operation of a cable system. [3] “Cable system” shall mean a facility or combination of facilities, constructed or operated pursuant to a franchise, that consists of a set of closed transmission paths and associated signal generation, reception and control equipment and that is designed to provide cable service to multiple subscribers within a community or a satellite master antenna system (SMATV), that serves subscribers in one or more multiple unit dwellings under common ownership, control or management.

Franchise” shall mean an initial authorization or renewal thereof, issued by a franchising authority, whether designated as a franchise, permit, license, resolution, contract, certificate, agreement or otherwise, which authorizes the construction or operation of facilities designed to provide cable service.

“Franchising authority” shall mean any state, political subdivision, or agency thereof, or any governmental entity empowered by Federal, State or local law to grant a franchise.

I.

It is ordered, That respondents C&D Electronics, Inc., a corporation, its successors and assigns, and its officers, and David Barwacz and Larry Bostelaar, individually and as officers of the corporation, and respondents’ agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with the manufacture, advertising, offering for sale, sale or distribution in or affecting commerce, as “commerce” is defined in the Federal Trade Commission Act, of any cable television decoder, descrambler, converter-decoder or converter-descrambler that may be used for the decoding, descrambling, and/or intercepting in any manner whatsoever of all or any part of any cable television transmission do forthwith cease and desist from selling or distributing, any such product to any person that is not an authorized person hereunder. Decision and Order 109 F.T.C.

II.

It is further ordered, That respondents C&D Electronics, Inc., its successors and assigns, and its officers, and David Barwacz and Larry Bostelaar, individually and as officers of the corporation, and respondents’ agents, representatives and employees, directly or through any corporation, subsidiary, [4] division or other device, in connection with the manufacture, advertising, offering for sale, sale, or distribution in or affecting commerce, as “commerce” is defined in the Federal Trade Commission Act, of any cable television decoder, descrambler, converter-decoder or converter-descrambler that may be used for the decoding, descrambling, and/or intercepting in any manner whatsoever of all or any part of any cable television transmission, do forthwith cease and desist from representing, directly or by implication that:

1. Any consumer may lawfully own or use such a product. 2. The ownership and use of any such product is the same as or similar to the ownership or use of telephone equipment. 3. Any consumer may lawfully use any such product without first obtaining authorization from a cable company and paying the required fees.

III.

It is further ordered, That respondents shall, for a period of five years after the date this order becomes final, maintain and upon request make available to the Federal Trade Commission for inspection and copying copies of:

1. All sales invoices showing sales of any cable television decoder, descrambler, converter-decoder or converter-descrambler with the invoices showing the name of the person or persons, to whom the sale was made, along with their address(es) and the quantity of such products sold to such person(s).

2. Documents verifying that for each such sale the buyer was an authorized person hereunder. [5] IV.

It is further ordered, That respondents shall, in connection with the sale of any cable television decoder, descrambler, converter-decoder or converter-descrambler that may be used for the decoding, descrambling, and/or intercepting in any manner whatsoever of all or any C & D ELECTRONICS, INC., ET AL. 77 72 Decision and Order part of any cable television transmission, disclose clearly and conspicuously in writing to the buyer the following statement: “The possession and use of cable TV equipment on any cable TV system without specific authorization from a cable company and the payment of required fees is strictly prohibited in most states. C&D sells its products only to authorized persons.” V.

It is further ordered, That respondents shall forthwith distribute a copy of this order to each of its agents, representatives and employees having advertising, marketing, sales or corporate policy responsibilities with respect to the subject matter of this order and secure from each such person a signed statement acknowledging receipt of a copy of the order.

VI.

It is further ordered, That respondents notify the Commission at least thirty (80) days prior to any proposed change in the corporate respondent such as dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries or any other change in the corporation which may affect compliance obligations arising out of the order. VIL.

It is further ordered, That respondents David Barwacz and Larry Bostelaar shall, for a period of five (5) years after the date of service of this order, notify the Commission of the discontinuance of their present employment and of their affiliation with any new business or employment, involving the manufacture, advertising, sale, offering for sale or [6] distribution in commerce of any cable television equipment or accessories, or of their affiliation with any new business or employment in which their duties or responsibilities would involve the manufacture, advertising, sale, offering for sale or distribution of cable television equipment or accessories, with each such notice to include respondent’s new business address and a statement as to the nature of the new business or employment, as well as a description of their duties and responsibilities.

Dissenting Statement 109 F.T.C.

VII.

It is further ordered, That respondents, within sixty (60) days from the date of service of this order, shall file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order.

DISSENTING STATEMENT OF COMMISSIONER MARY L. AZCUENAGA I dissent from the Commission’s decision to accept the consent agreement with C&D Electronics and its principals. Although this case may technically meet the criteria for application of an unfairness theory under Section 5 of the FTC Act, it is different from the usual case in which the Commission seeks to halt some form of seller behavior that creates or unfairly takes advantage of obstacles to fully informed decisions by consumers.

In this case, the product is a decoder, a device for obtaining access to cable programming. C&D allegedly acted unfairly by selling decoders to consumers who used them to obtain cable programming without paying for it, resulting in lost revenues for cable companies, higher cable prices for consumers and reduced franchise fees for municipalities. The order attempts to deal with the alleged unfairness by prohibiting C&D from selling decoders to unauthorized users. The alleged injury, however, stems not from any overreaching by C&D but rather from the voluntary use of pirate decoders by consumers. What the order is really trying to stop—or, given C&D’s size relative to the rest of the industry, to inhibit to some degree—is not the unlawful behavior of the seller of the product but rather the unlawful behavior of the consumers who purchase the product. This may be a laudable goal, but it is not the sort of accomplishment this agency was set up to achieve. By accepting this order, the Commission embarks on a course of social engineering that brings a radical new meaning to the concept of consumer protection. No doubt consumers engage in a good deal of behavior, lawful or unlawful, that is costly to society. Some consumers litter our parks and highways, but the expense of cleaning up is not a basis for action by the Commission to restrict the sale of soft drink bottles and fast foods. Although federal or state lawmakers properly may attempt to restrict such behavior, I know of no mandate for the Federal Trade Commission to regulate undesirable behavior of individual citizens not involved in trade.

To address the problem of unauthorized cable TV decoders, Congress enacted the Cable Communications Policy Act of 1984, 47 U.S.C. Section 553, which exposes the users and sellers of pirate decoders to C & D ELECTRONICS, INC., ET AL. 79 72 Statement substantial criminal penalties and civil liability. A number of state law restrictions also exist. In addition, the cable industry is developing technology to block pirate decoders. It seems to me that this agency should use its increasingly scarce resources to monitor unfair methods of competition and unfair or deceptive acts and practices by those who are engaged in trade and should leave the policing of the unauthorized use of decoders by consumers to the cable industry and to the Department of Justice.

SEPARATE STATEMENT OF CHAIRMAN DANIEL OLIVER After extensive consideration and reflection I have concluded that the consent agreement in this matter should be provisionally accepted. This case fits the analytic framework that we have established for our “unfairness” jurisdiction, and the facts present justify Commission action. There is reason to believe that the practices of C&D Electronics have resulted in substantial consumer injury that is not offset by any legitimate countervailing benefits to consumers or competition and that the resultant consumer injury was not reasonably avoidable.1 CONSUMER INJURY The cost of stolen cable services is initially borne by the cable companies, the premium cable services, and the municipalities that grant cable franchises. There is little doubt, however, that most or all of those costs are passed along to honest cable service subscribers in the form of higher prices.

Such activities can result in actual and substantial consumer injury, far greater than that challenged in many of our other cases. In many of our deception and competition cases, for example, we rely in large part on presumptions about the likely adverse effects on consumers. And like our other competition and [2] consumer protection actions, this injury takes place in the context of a commercial transaction.

Moreover, consumer injury can provide a basis for Commission action even when there is no direct contact between the respondent and the ultimate consumer. Our concerns in halting conduct that results in unjustified harm to the public is not limited to injury incurred by the direct purchasers of products. An example of this is the Commission’s consent agreement in Phillip Morris, Inc., 82 FTC 16 “liam wholly unable to fathom concerns that we are engaging in some form of social] engineering by accepting this consent agreement. In this case there is no attempt to substitute our views for those of an informed public. Congress, it should be noted, has already passed legislation prohibiting the type of conduct alleged here. Statement 109 F.T.C.

(1973), where the company had distributed free samples of razor blades that the Commission alleged were a safety hazard because they could come into the hands of small children or injure others who had not purchased a product.

The consumer injury at issue here is similar to that in our competition cases, where our purpose is ultimately to prevent restraints on trade that would result in consumer injury in the form of increased prices. In FTC v. Indiana Federation of Dentists, 106 S.Ct. 2009 (1986) the Court found that the concerted action taken by the dentists was: likely enough to disrupt the proper functioning of the price-setting mechanism of the market that it may be condemned even absent proof that it resulted in higher prices or, as here, the purchase of higher priced services, than would occur in its absence. Id. at 2019. Such price increases injure consumers who cease purchasing or turn to a less satisfactory substitute (i.e., who then have no direct contact with the respondent) as well as those who continue to purchase at higher prices. The injury alleged [3] here is more direct than in many of those cases, and I am aware of no compelling reason for treating the situations differently.

In addition, in a case of this sort injury to consumers may go well beyond a simple increase in prices; the activity here may provide disincentives that will result in services not being available to consumers at all. There is little or no reason for businesses to establish cable services, or expand and improve existing ones, unless sufficient revenue can be generated to warrant expenditures. Widespread or unchecked free riding could discourage ventures that would offer such services or could result in raising the prices for cable subscriptions in existing networks beyond optimal levels. Thus such action could not only result in present injury, but also could undermine the competitive process that encourages innovation or maintenance of such facilities and thereby increase the risks of collateral consumer injury of a different type.

COUNTERVAILING BENEFITS TO CONSUMERS OR COMPETITION I am unable to identify any collateral benefits to consumers or competition that are likely to offset the conduct alleged here. Significant free riding on services paid for by others can hardly be considered a benefit that offsets the resultant costs imposed on honest cable subscribers. [4] C & D ELECTRONICS, INC., ET AL. 81 72 Statement AVOIDABILITY OF THE INJURY This aspect of our unfairness jurisdiction involves an inquiry into whether market forces provide an adequate disincentive for conduct injurious to consumers.? In many of our cases there is a defect in the information available to consumers in making purchase decisions that they cannot easily protect themselves from.3 However, we have also recognized that unfairness may be involved in situations where there is no informational problem—for example, where a clearly defined right cannot be enforced effectively by private actions.4 In my view, it was this rationale that supported our finding of liability in Orkin Exterminating, Docket 9176, (December 15, 1986). In that case, like this one, there was a firmly established (and rational) [5] legal standard governing the conduct, the consumer injury alleged was substantial and readily identifiable, and the injury resulted from commercial transactions within our jurisdiction and expertise.5 Private actions may not be able to deter the type of conduct that C&D Electronics was charged with engaging in. First, most cable companies and municipalities do not have the technology to detect the use of these sorts of decoders, and thus have a difficult time determining the scope of the problem and the source of illegal decoder use.§ Thus most municipalities, even though deprived of revenue, have little incentive to take action. Cable companies are faced with the same difficulties. Moreover, they may have little incentive to fund litigation which will benefit competitors as much as, or perhaps more, than themselves. Even where a problem is identified and litigation ensues, the relief obtained frequently extends only to the geographic area of the complaining party. Neither trade associations nor the premium services themselves have mounted efforts to curtail such activities. As a result I believe that the consumer injury alleged to result from the actions of C&D Electronics is not reasonably avoidable. [6] 2 The need for this inquiry is made explicit in the Commission’s Policy Statement on Unfairness, and is incorporated into the analysis of whether injury is reasonably avoidable: Normally we expect the marketplace to be self-correcting, and we rely on consumer choice—the ability of individual consumers to make their own private purchasing decisions without regulatory intervention—to govern the market.

Unfairness Statement at 7.

3 Id. “[W]e rely on consumer choice—the ability of individual consumers to make their own private purchasing decisions without regulatory intervention ....” . 4 In5 1 3 8 1 3 695 2593 58 12 96.136459 some5 1 3 8 1 4 763 2593 73 12 96.250488 senses5 1 3 8 1 5 846 2593 41 17 96.638847 any5 1 3 8 1 6 898 2587 69 23 96.638847 injury5 1 3 8 1 7 977 2593 38 12 96.846527 cans 1 3 8 1 8 1026 2586 25 19 93.299835 be5 1 3 8 1 9 1062 2586 148 19 91.930519 avoided—for5 1 3 8 1 10 1220 2586 102 24 96.695816 example,5 1 3 8 1 11 1332 2585 27 24 97.016487 by5 1 3 8 1 12 1369 2586 70 23 96.688911 hiring5 1 3 8 1 13 1450 2585 142 24 96.661133 independents 1 3 8 1 14 1602 2587 83 21 96.600418 experts5 1 3 8 1 15 1696 2587 21 17 96.952438 to5 1 3 8 1 16 1727 2586 42 18 96.833611 tests 1 3 8 1 17 1778 2584 27 19 96.953644 all5 1 3 8 1 18 1816 2584 99 24 96.748848 products4 1 3 8 2 0 607 2617 1308 26 -1 5 1 3 8 2 1 607 2620 20 18 96.706619 in5 1 3 8 2 2 636 2620 100 21 95.972206 advance,5 1 3 8 2 3 745 2626 23 12 96.808968 or5 1 3 8 2 4 776 2620 27 23 96.781166 by5 1 3 8 2 5 812 2620 82 23 96.891701 private5 1 3 8 2 6 904 2620 53 23 96.308060 legal5 1 3 8 2 7 966 2620 80 18 96.914474 actions5 1 3 8 2 8 1054 2620 32 18 93.206276 for5 1 3 8 2 9 1095 2619 164 24 90.003830 damages—but5 1 3 8 2 10 1267 2619 60 19 96.796165 these5 1 3 8 2 11 1336 2624 84 14 96.572289 courses5 1 3 8 2 12 1429 2624 49 17 96.100937 may5 1 3 8 2 13 1486 2618 25 19 96.957085 be5 1 3 8 2 14 1520 2621 34 16 96.645973 too5 1 3 8 2 15 1563 2618 113 23 96.702217 expensive5 1 3 8 2 16 1684 2620 22 16 96.482018 to5 1 3 8 2 17 1714 2617 25 19 96.482018 be5 1 3 8 2 18 1748 2617 126 24 96.975670 practicable5 1 3 8 2 19 1882 2617 33 18 96.600716 fora 1 3 8 3 0 607 2652 776 24 -1 5 1 3 8 3 1 607 2653 115 19 96.421829 individuals 1 3 8 3 2 733 2659 122 12 96.838936 consumers5 1 3 8 3 3 865 2655 22 16 95.855988 to5 1 3 8 3 4 897 2653 98 23 93.298538 pursue.”5 1 3 8 3 5 1006 2652 125 19 92.623337 Unfairness5 1 3 8 3 6 1141 2652 124 22 93.280708 Statement,5 1 3 8 3 7 1276 2652 46 19 90.248734 n.195 1 3 8 3 8 1333 2654 22 17 96.858299 at5 1 3 8 3 9 1366 2652 17 18 96.048759 7.3 1 3 9 0 0 607 2683 1307 56 -1 4 1 3 9 1 0 631 2683 1283 26 -1 5 1 3 9 1 1 631 2686 7 13 94.479378 55 1 3 9 1 2 646 2686 67 19 94.479378 These5 1 3 9 1 3 721 2686 166 19 96.299591 considerations5 1 3 9 1 4 895 2686 143 19 96.655418 demonstrates 1 3 9 1 5 1047 2686 48 23 96.382530 why5 1 3 9 1 6 1103 2686 60 18 96.984024 there5 1 3 9 1 7 1171 2686 18 18 96.799721 is5 1 3 9 1 8 1197 2691 26 13 96.791229 no5 1 3 9 1 9 1231 2685 43 19 96.960777 roles 1 3 9 1 10 1283 2685 33 19 96.910988 for5 1 3 9 1 11 1323 2685 36 19 96.643974 thes 1 3 9 1 12 1367 2684 139 20 95.424149 Commissions 1 3 9 1 13 1514 2685 21 19 96.829948 in5 1 3 9 1 14 1544 2686 88 18 96.551971 matters5 1 3 9 1 15 1640 2683 51 21 96.945137 such5 1 3 9 1 16 1700 2690 24 13 96.733025 as5 1 3 9 1 17 1731 2683 101 25 96.413368 pollution5 1 3 9 1 18 1840 2689 25 13 96.984077 or5 1 3 9 1 19 1873 2689 41 18 96.579758 gun4 1 3 9 2 0 607 2719 84 20 -1 5 1 3 9 2 1 607 2719 84 20 96.745331 control.2 1 4 0 0 0 606 2751 1309 58 -1 3 1 4 1 0 0 606 2751 1309 58 -1 4 1 4 1 1 0 631 2751 1284 25 -1 5 1 4 1 1 1 631 2754 7 12 89.852379 65 1 4 1 1 2 647 2752 57 20 95.789871 Even5 1 4 1 1 3 714 2752 19 20 96.750359 if5 1 4 1 1 4 738 2753 35 19 96.407845 thes 1 4 1 1 5 782 2752 125 24 96.407845 technology5 1 4 1 1 6 916 2755 20 17 96.721588 to5 1 4 1 1 7 945 2753 130 18 96.653107 circumvent5 1 4 1 1 8 1084 2758 37 13 96.996040 uses 1 4 1 1 9 1129 2752 25 19 96.507805 of5 1 4 1 1 10 1159 2752 58 19 96.216324 illicit5 1 4 1 1 11 1225 2752 100 19 96.481606 decoders5 1 4 1 1 12 1334 2758 54 13 96.486435 were5 1 4 1 1 13 1397 2751 110 22 96.519882 available,5 1 4 1 1 14 1516 2752 103 21 96.903030 however,5 1 4 1 1 15 1629 2751 36 19 96.992050 thes 1 4 1 1 16 1674 2753 44 17 96.983597 costs 1 4 1 1 17 1726 2751 24 19 96.938362 of5 1 4 1 1 18 1755 2751 160 24 96.400963 implementing4 1 4 1 2 0 606 2785 868 24 -1 5 1 4 1 2 1 606 2786 125 23 96.183304 safeguards5 1 4 1 2 2 741 2786 24 19 96.671669 of5 1 4 1 2 3 772 2786 47 20 96.767700 that5 1 4 1 2 4 829 2788 49 21 96.604897 types 1 4 1 2 5 889 2785 68 20 96.618057 would5 1 4 1 2 6 968 2785 101 24 96.407387 probably5 1 4 1 2 7 1079 2785 25 20 96.973473 be5 1 4 1 2 8 1115 2785 94 24 96.447395 imposed5 1 4 1 2 9 1220 2791 26 14 96.736862 on5 1 4 1 2 10 1257 2791 122 14 95.976768 consumers5 1 4 1 2 11 1389 2791 23 13 96.947823 as5 1 4 1 2 12 1422 2785 52 19 95.534393 well. Statement 109 F.T.C.

CONCLUSION Accepting this consent decree does not, to my mind, signal a broad foray into Commission enforcement of all property rights. In fact, I would suspect that situations like the one present here will come to our attention infrequently. When we do find substantial consumer injury in such situations, it is important that the conduct satisfy our criteria on unfairness, and it is particularly necessary that we be able to determine whether private actions are adequate to vindicate private rights. This process must, of necessity, result from case-by-case analysis based on the particular facts involved. I am satisfied that the consent agreement negotiated in this matter satisfies those standards, and I am therefore voting to accept it provisionally. ALLIED CORPORATION 83 83 Modifying Order